Bally Total Fitness

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In your document, analyze and explain using ANY OR ALL models/material from the course:

a) What are the most important strategic issues that Bally Total Fitness is facing?

Strategic assumptions

* Health clubs would become more diverse as they catered to certain demographics or created niches for themselves. The next great bonanza has to be the kids”, baby boomers another “bonanza market” * The market will continue growing due to the concern about the health and well-being.


* Leading firm in 2004 in the U.S. Health Club Industry.
* Boosted the accountability of club managers for profitability. * Begun to strength its internal control system (pricing and selling) * Commitment to increase Bally members and maximize revenue per member * Has more than 50 years in the market

* Positioned name
* Revenues of USD 954 million in 2003
* 3.6 million members
* Operate over 360 outlets in the US and more than 50 internationally. * “He’s been a champion at finding ways to drive revenues out of their existing membership base. Bally’s non club products plus its 6,000 personal trainers contributes USD 150 million annually to the company’s revenue. * Bally enjoyed member retention rates that were higher than the industry average. * During the second quarter of 2004, the numbers of new members increased 22% year over year and total membership fees increased 15% during the same period.

* Bally’s stock prices had collapsed. Intense capital-market pressure. * The company had restated earnings.
* Working in a health club was decidedly non-glamorous work. It’s difficult to find motivated staff to work on such conditions, including managing positions. * Running tow businesses: a finance company and an operating company. * Series of accounting and control problems at the end of the year 2003. SEC began to investigate. * The company faced lawsuits from shareholders...
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